DoorDash, GrubHub and others argue that city law capping fees at 15% has cost them « hundreds of millions of dollars. »
The nation’s biggest food delivery services including Uber Eats and DoorDash are suing New York City, arguing that a fee cap first enacted during the pandemic is costing them « hundreds of millions of dollars. » The Big Apple last month implemented a permanent cap of 15% per delivery from places like Grubhub. Lawmakers first enacted the limit as a temporary measure during the pandemic, with the intent that it would steer more money toward family-owned restaurants that were hit hard by the coronavirus. But in a lawsuit filed late Thursday, the food delivery apps said the 15% limit was arbitrary and unconstitutional and would force them to shift costs to delivery customers. « The ordinance is unconstitutional because, among other things, it interferes with freely negotiated contracts between platforms and restaurants by changing and dictating the economic terms on which a dynamic industry operates, » the lawsuit, filed in New York’s Southern District, states. The food delivery services are asking a Manhattan judge for a temporary injunction and an unspecified amount in damages. Mark Gjonaj, a New York City Council member who pushed for making the cap permanent, told the Wall Street Journal that the council intends to move forward with the fee limits.
